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CNBC’s mad man of money, Jim Cramer a cautious investor

By Claudia BuckThe Sacramento Bee

Wed., Feb. 5, 2014

Jim Cramer has made a living the last eight years talking—and yelling—about stocks as the flamboyant, crazily enthusiastic stock picker on CNBC.

With two Harvard degrees, the 58-year-old investor-turned-TV-host is opinionated and animated. He peppers his daily cable TV show with rapid-fire chatter about stock companies and interviews with CEOs. A former newspaper reporter, he ran a hedge fund that boasted annual profits of 24 percent before he shut it down in 2001, largely for stress-related reasons. He has just published a new book Jim Cramer’s Get Rich Carefully.

Question: Last year was off the charts for [U.S. stocks]. Are we in for another blockbuster year?

Answer: No. If the economy doesn’t pick up, we will not be able to make a lot of headway.

Q: Your book describes the financial meltdown that drove many out of the stock market. Despite that, you’re still encouraging people to embrace stocks.

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A: Your first $10,000 should be in an index fund, so you’re diversified. Only after that should you be investing in a portfolio of your own. Index funds are great because of their low fees. The book is about how you can invest wisely if you spend the time. If you try to do it quickly, you’ll lose money.

Q: You emphasize your investing mistakes, such as being too emotionally invested in a stock.

A: If you fall in love with a stock that’s a terrible thing. I’ve made good calls and bad calls. The good picks take care of themselves. The bad picks ... if you don’t study and learn from the mistakes, they can overwhelm the good ideas.

Q: Your book lists the 21 “bankable” CEOs, who can inspire their companies no matter what. What makes them different?

A: They’re basically head coaches who run NFL-like teams. They’ve won more than they’ve lost. Leadership does matter.

Q: Some of your critics say you’re an insider exhorting mere mortals into buying/selling stocks in ways that can be dangerous, if not downright destructive, to their financial well-being.

A: I want people to have a five to seven year horizon on investing, showing great discipline. You have to do some homework and not do it blindly.

Q: In the book, you mention how your daughters’ insights have influenced some of your picks. How often do you glean ideas on investments through younger eyes?

A: A tremendous amount. I’ve taught in high schools and (appeared) at 17 colleges. You sit and listen to what (young people) think is going to happen, what devices they use, how they view the world. It’s been very valuable. My daughters are 19 and 22. They got me into Dominos, Facebook, Yahoo, Google, Netflix ... all very powerful trends that my kids turned me on to.

A: Today, I had a trainer come at 4 a.m. and had a two-hour workout. I wrote a piece about PPG (Pittsburgh Plate Glass) for my RealMoney blog. Then prepped for two hours for (CNBC’s) morning show, “Squawk on the Street.” Then came back here and started on another piece for The Street.com. After we hang up, I’ll be looking at my game plan for the afternoon show. Ordering lunch. I’ll write three pieces with my nephew who’s my head writer. The (“Mad Money”) show starts around 4:15, finishes up at 6. And then I’ll collapse. That’s my day.

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